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SA equity funds that lured the most money in a year

It seems investments are primarily being distributed to smaller funds.
Image: Waldo Swiegers, Bloomberg

Earlier this year, the Association for Savings and Investment South Africa (Asisa) noted that there had been a substantial shift in holdings in local collective investment schemes (CISs) over the past five years.

At the end of March 2015, 23% of the money in CISs was in equity funds. By the end of March this year, that had fallen to just 15%.

The major beneficiaries of this change were interest-bearing funds. From 24% of assets in 2015, these CISs were up to 34% at the end of March this year.

Part of the reason for this is that at the end of March, the stock market had just bottomed from the Covid-19 crash. There had therefore been a significant reduction in the value of equity portfolios.

However, it is worth noting that bonds had sold off too. So these numbers must also reflect how local equity funds have generally experienced outflows over this period.

According to Asisa statistics, equity funds saw nearly R2 billion in outflows in the first three months of 2020, and more than R10 billion in outflows in the last quarter of 2019.

However, a lot of this has been concentrated withdrawals from some bigger portfolios. Some other funds in this category have recorded meaningful in-flows over the same time.

The top 10

To understand which funds have been attracting assets, Citywire put together a list of the 10 local equity funds with the highest net inflows over the past 12 months.

Two things stand out.

The first is that the largest funds in this category are entirely absent from the list. It appears that investments are primarily being distributed to smaller funds.

The second is that there is no consistent correlation between flows and performance. Of the 10 funds receiving the highest inflows, only the Fairtree Equity Prescient fund and Truffle SCI Institutional Equity fund have out-performed the FTSE/JSE All Share Index (Alsi) over one, three and five years.

This would suggest that flows have followed performance in these cases.

However, some of the other funds have recorded distinctly underwhelming returns over the past five years. Two of the 10 funds on the list, including the fund with the highest inflows over this period, have not only consistently under-performed the Alsi, but have failed to even match the category average.

Scroll through the gallery to see which local equity funds have attracted the highest net inflows over the past 12 months, together with an analysis of their relative performance.

Patrick Cairns is South Africa Editor at Citywire, which provides insight and information for professional investors globally.

This article was first published on Citywire South Africa here, and republished with permission.


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This is really a nothing article without any substance, Patrick?

Lol. I think so too. What is the message here?

Beware of SA Equity Funds?

Are these only owner-directed / retail moves or does it include moves by people mismanaging other people’s money?

It seems from the graphic that more than R10billion moved to funds that could not even beat the JSE over 5 years? So these fun damagers receive at 1.5% expense ratio about an EXTRA (not total mind you – extra) R150,000,000 to do absolutely nothing different than they did pathetically poorly for the last five years.

I am unclear why they allow their names and photographs to be associated with their funds…

Not unlike Alibaba and the Forty Thieves!

According to the graph, Fairtree Equity Prescient fund actually lost out in the last 12 months so it leaves only Truffle SCI (although that 5-year number looks close on loosing out to the JSE)

How about an article on useless ANC-linked tenderpreneurs who fleeced the taxpayer over the last few years? That would make really interesting reading!

Wow you get paid for this?

I might apply for weekend golf money.

Bullet points are your friend. Also I still don’t know the funds that “lured the most money”. This is laughably bad writing.

This article is highlighting broken clocks (that are correct twice a day). These firms have a suite of products and these are simply the flavors of the day.

How about highlighting their shockers – for example, the Truffle Flexible Income Fund. How does one explain that?

I specifically waited till there at at least a number of replies before commenting. Patrick, I would not give most comments a second thought if I were in your shoes. If one do not understand clearly, or haven’t got the experience to extract value from a technical report, it doesn’t mean it is a worthless report. Sometimes it rather the readers that can’t extrapolate the obvious value of the information. To mention but a few points why the information covered by this article is very sensible and of value, the following:
a) it confirms and speak about the recurring errors made (mostly) by retail investors (and/or their so-called financial advisors) – like exiting equity funds right after the market too the biggest hiding in about 12 years;
b) the lack of ignorant way in which decisions are made to move to another fund without regard for cost implications or the ability of the fund manager;
c) it gives a lot of information that establishes human behavioural patterns;
d) it gives some information for the astute investor to know what to steer clear of in order to avoid the stampede or knee-deep manure consequences of typical herd behaviour; etc, etc.
Sometimes it is quite fitting to acknowledge that one do not get it – at least then somebody can explain it to such person. No shame in that.

End of comments.





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